Shadow Chancellor wrong on rented housing

The Shadow Chancellor of the Exchequer, John McDonnell MP, has today given his speech to the Labour Party conference. During the speech he referred to cutting “billion pound tax breaks given to buy to let landlords” and called for action to “control exorbitant rents.”…

The Shadow Chancellor of the Exchequer, John McDonnell MP, has today given his speech to the Labour Party conference.

During the speech he referred to cutting “billion pound tax breaks given to buy to let landlords” and called for action to “control exorbitant rents.”

Mr McDonnell failed to remind delegates that, in the words of Paul Johnson, Director of the Institute for Fiscal Studies, “rental property is taxed more heavily than owner occupied property.”

He failed also to tell the conference that Labour’s own Ministers in the Welsh Government have argued against rent controls as they reduce the quality of housing and stifle the supply of much needed new housing.

In February this year, the Minister for Communities and Tackling Poverty, Lesley Griffiths AM told the Welsh Assembly:

“I do recognise that rent control can look attractive initially, but I think previous experience shows that rent controls reduce the incentive for landlords to invest and can then lead to a reduction in quality housing. Those properties that are still subject to rent control under the Rent Act 1977 are often of the poorest quality, so I think such a proposal would require very careful consideration. Again, I think that could give possible unintended consequences to the supply of private rented properties.”

“Minister, I wonder if you’ll tell us if you’ve considered rent control methods in the lead up to this Bill and, if so, why it doesn’t appear to be included.”

The Minister replied:

“Okay. I thank Jocelyn Davies for her questions. In relation to rent controls,I do recognise that rent control can look attractive initially, but I think previous experience shows that rent controls reduce the incentive for landlords to invest and can then lead to a reduction in quality housing. Those properties that are still subject to rent control under the Rent Act 1977 are often of the poorest quality, so I think such a proposal would require very careful consideration. Again, I think that could give possible unintended consequences to the supply of private rented properties.”

About the author

RLA

The Residential Landlords Association (RLA) represents the interests of landlords in the private rented sector (PRS) across England and Wales. With over 23,000 subscribing members, and an additional 16,000 registered guests who engage regularly with the association, we are the leading voice of private landlords. Combined, they manage almost half a million properties.

About Author

RLA

The Residential Landlords Association (RLA) represents the interests of landlords in the private rented sector (PRS) across England and Wales. With over 23,000 subscribing members, and an additional 16,000 registered guests who engage regularly with the association, we are the leading voice of private landlords. Combined, they manage almost half a million properties.